Warren Buffett Cartoon Series – What to Consider When Filing My Taxes Online

Is e-filing a much better way to file your taxes? 

Americans and the IRS may not agree about everything, but they are largely on the exact same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed.  E-filing is popular as it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS cash because its workers do not need to spend time manually processing your return. And in return, you can get any refund you’re owed faster, particularly if you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing really provide you access to all of the forms you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it may be the best filing option for your needs.

If you’re Considering e-filing, some of the advantages include:

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced likelihood of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically implies there’s a digital backup of your tax records.  So if something happens to your paperwork, you will have an electronic backup.

The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is simple.

The way to e-file a tax return?

You have four options for submitting an electronically filed tax return to the IRS.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program.  The types do the math for you and offer standard advice.  You can only do your federal return with all these forms. 
    2. Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to steer you through the completion of your forms.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

      Using online tax preparation software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.

      Is e-filing really secure?

      While e-filing is suitable, you may worry about security — particularly with so many data breaches.  But experts agree that this isn’t a problem that should deter you from e-filing.

      “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”

      Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data safe.  “Trainers normally use IRS particular APIs that need ab sessions,” Chow says.  “All of this is routed over TLS encrypted links “

      It’s important to use a trusted service that will assist you file your taxes.  Chow advises to not e-file on a computer or use an online connection that isn’t private.

      Bottom line

      For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make certain that you use tax planning software from a trusted source, so you can make certain the information you provide to transmit to the IRS will be kept protected.